Ed, Greg, and George:
Thanks for all your research and commentary on the floorless convertible issues. It has been a real eye opener. I do have a few thoughts on these and other topics.
Although the stock price certainly affects us (investors) directly, I don't see how it has a material affect on Ancor's ability to stay in business. Granted, the dilution has a negative impact on future revenue and earnings per share, but the key (as always) is for Ancor to start putting up some decent numbers. (The INRANGE deal was a great start, in my opinion.) To that end, I have done some research into the INRANGE deal. Most of this is my own speculation, and is subject to the usual disclaimers. <g>
I am convinced that the INRANGE deal involves more than just ASICs. I believe that we will see INRANGE offering a full range of Fibre Channel products. I also believe that this deal has significant potential for Ancor above and beyond the $7-9 Million already announced. (This assumes that the products are successful.)
The mainframe world uses something called an ESCON Director to provide connectivity to storage devices. Sometimes, a more generic term called "Channel Director" is used. An AltaVista search of the term "Channel Director" returns some pretty interesting results:
altavista.com
Note that there are two companies that appear repeatedly. McData and INRANGE (General Signal or GS Networks). It seems to me that INRANGE must be one of McData's biggest competitors in this space. Taking this one step further, I reviewed both the INRANGE and McData web sites. One of my conclusions is that these channel directors can get pretty big. (Up to 256 ports, with 48, 64, and 128 port devices also common.) The other conclusion is that I think I know where INRANGE is headed, and the information came from their biggest competitor. This link explains it in detail:
mcdata.com
For complete details, view or print the datasheet here:
mcdata.com
This gizmo is an "Enterprise Fibre Channel Director". If you read through the description and the specifications, I think you will agree that this is Brocade's SilkWorm technology at work. There are 32 ports of 100 MBps Fibre Channel, Class 2/3 ONLY, 4 ports per card, and a fabric latency of less than 2 microseconds.
My speculation is that INRANGE will also be marketing an Enterprise Fibre Channel Director, except that it may be much larger than McData's. (Somewhere between 64 and 256 ports.)
If I am correct in my analysis, this is an OEM deal, and it has been right under our noses for over a week. It also seems to me that Ancor's scalability (and possibly Class 1/Intermix support) was a factor in their decision.
If all that isn't interesting enough, here is another point. If what I am thinking is correct, this marks Ancor's entry into a totally new market, above and beyond the areas that we have researched in the past, and perhaps providing additional OEM opportunities. This is pure speculation on my part, but consider the possibility that companies that now provide ESCON Directors will require Fibre Channel Directors as their customers move to Fibre Channel.
An AltaVista search on the term "ESCON Director" provides some new names that we haven't discussed here, such as Amdahl, Comparex, and even Cisco with some sort of channel attachment interface card for their 7000 and 7500 routers.
altavista.com
Once again, these are my own thoughts and conclusions. The fact that the stock price has returned to the $1 mark following a $7-9 Million announcement is certainly troubling, and I don't want to minimize that fact. It certainly appears as if most of the decline was caused by Reg D selling, but there doesn't seem to be any way to find out when it will be over.
Craig |
